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East African Prospects Report East African prospects An update on the political economy of Kenya, Rwanda, Tanzania and Uganda David Booth, Brian Cooksey, Frederick Golooba-Mutebi and Karuti Kanyinga May 2014 May 2014 Report East African prospects An update on the political economy of Kenya, Rwanda, Tanzania and Uganda David Booth, Brian Cooksey, Frederick Golooba-Mutebi and Karuti Kanyinga Prospects in Kenya, Rwanda, Tanzania and Uganda are a matter of small variations and stepwise change within ‘limited access orders’ Pockets of crony capitalist success are set to get larger and more dynamic in Kenya, with some spread effects Political obstacles to coordinated sector reform are going to endure, with especially damaging effects in Tanzania The leadership factors that matter are collective and have to do with political organisation and underlying settlements Reforms could be achieved ‘against the odds’ if practical development organisations were to adopt a different way of working Shaping policy for development odi.org Acknowledgements The authors are grateful to the large number of individuals who shared views and insights on a confidential basis with the research team. The views expressed in the report are, however, those of the authors alone, and we remain responsible for any errors or omissions. No opinions should be attributed to the Overseas Development Institute. East African prospects i Table of contents Acknowledgements i Abbreviations iv Executive summary vii Framing the study vii Kenya viii Tanzania ix Uganda ix Rwanda x Implications and ways forward x Introduction 1 1 East African political economy: some framing propositions 3 1.1 Introduction 3 1.2 Political and economic power linkages under ‘limited access orders’ 4 1.3 Crony capitalism’s islands of effectiveness 5 1.4 Politically supported coordination capabilities 7 1.5 Leadership, group interests and political settlements 9 2 Kenya 13 2.1 Background 13 2.2 Political and economic power linkages 14 2.3 Presidential authority and development leadership 25 2.4 Political challenges and institutional restraints 26 2.5 Issues in the governance of growth 29 2.6 Prospects and risks 31 2.7 Conclusions 34 3 Tanzania 35 3.1 Background 35 3.2 Political and economic power linkages 36 3.3 Presidential authority and development leadership 37 3.4 Political challenges and institutional restraints 39 3.5 Issues in the governance of growth 46 3.6 Prospects and risks 54 3.7 Conclusions 55 4 Uganda 56 4.1 Background 56 4.2 Political and economic power linkages 56 4.3 Presidential authority and development leadership 59 4.4 Political challenges and institutional restraints 61 4.5 Issues in the governance of growth 69 4.6 Prospects and risks 70 4.7 Conclusions 75 ODI Report ii East African prospects ii 5 Rwanda 76 5.1 Background 76 5.2 Political and economic power linkages 76 5.3 Presidential authority and development leadership 80 5.4 Political challenges and institutional restraints 81 5.5 Issues in the governance of growth 82 5.6 Prospects and risks 83 5.7 Conclusions 85 6 Implications and ways forward 86 6.1 How much crony capitalism? 86 6.2 How much reform coordination capability? 87 6.3 What sort of political settlements? 89 6.4 How to achieve reforms against the odds 90 References 93 Figures Figure 1: Variations in Kenya’s economic growth, 1991-2012 30 Figure 2: CCM and opposition parties’ performance in national elections, 1995-2010 40 Tables Table 1: Members of Kenya’s trade and investment delegation to China, August 2013 24 Table 2: Major corporate taxpayers, Tanzania, 2005-11 36 Table 3: Marketing preferences, Tanzania (percent) 48 Table 4: Selected Tanzanian exports by value (USD m) 52 Table 5: Manufactured exports of EAC members, 2000, 2005 and 2010 (USD m) 52 Boxes Box 1: President Kikwete’s agriculture initiatives 37 Box 2: SAGCOT, Tanzania’s agricultural growth corridor 51 Box 3: An insider view of the current EAC impasse 55 ODI Report iii East African prospects iii Abbreviations AFC Agricultural Finance Company (Kenya) ASDP Agriculture Sector Development Programme (Tanzania) AU African Union APPP Africa Power and Politics Programme (research) BRN Big Results Now (Tanzania) CAADP Comprehensive Africa Agriculture Development Programme CCK Communications Commission of Kenya CCM Chama cha Mapinduzi (Party of the Revolution, Tanzania) CHADEMA Chama cha Democrasi (Democratic Party, Tanzania) CIC Commission on the Implementation of the Constitution (Kenya) CORD Coalition for Reforms and Democracy (Kenya) COW Coalition of the Willing (EAC) CP Conservative Party (Uganda) CVL Crystal Ventures Limited (Rwanda) DFID Department for International Development (UK) DP Democratic Party (Kenya, Uganda) DRA Developmental Regimes in Africa (research project DRC Democratic Republic of Congo EAC East African Community EPP Elites, Production and Poverty (research project) ETG Export Trading Group (Tanzania FDC Forum for Democratic Change (Uganda) FDI Foreign direct investment FDLR Forces démocratiques pour la liberation du Rwanda ODI Report iv East African prospects iv GDP Gross Domestic Product GMO Genetically modified organism HIPC Heavily Indebted Poor Countries (debt initiative) IFI International financial institution (World Bank, International Monetary Fund) ICC International Criminal Court JEEMA Justice, Education, Economic Revitalization, Morality and African Unity (Uganda) JSC Judicial Service Commission (Kenya) IEBC Independent Electoral and Boundaries Commission (Kenya) IMF International Monetary Funds KADU Kenya African Democratic Union KANU Kenya African National Union KCC Kenya Cooperative Creameries KEPSA Kenya Private Sector Alliance KK Kilimo Kwanza (Agriculture First, Tanzania) KNCCI Kenya National Chamber of Commerce and Industry LAO Limited access order MONUSCO UN Mission for the Stabilisation of Congo MP Member of Parliament MTP Medium Term Plan (Kenya) M23 23 March Movement (DRC) NAADS National Agricultural Advisory Services (Uganda) NAFSN New Alliance for Food Security and Nutrition (Tanzania) NARC National Rainbow Coalition NGO Non-governmental organisation NCPB National Cereals and Produce Board (Kenya) NMC National Milling Corporation (Tanzania) NRM National Resistance Movement (Uganda) ODI Report v East African prospects v OAO Open access order ODM Orange Democratic Movement (Kenya) OECD Organisation for Economic Cooperation and Development OXFAM Oxford Committee on Famine Relief PAC Public Accounts Committee PEAPA Political Economy of Agricultural Policy in Africa (research project) PIRT Presidential Investment Round Table (Uganda) PNU Party of National Unity (Kenya) PSC Public Service Commission (Kenya) PSF Private Sector Federation (Rwanda) REPOA Research on Poverty Alleviation (Tanzania) RIG Rwanda Investment Group RPF Rwandan Patriotic Front SADC Southern African Development Community SAGCOT Southern Agricultural Growth Corridor of Tanzania SRA Strategy for Revitalising Agriculture (Kenya) TAFSIP Tanzania Agriculture and Food Security Investment Plan TD Tracking Development (research project) TNA The National Alliance (Kenya) TNBC Tanzania National Business Council TRA Tanzania Revenue Authority UN United Nations URP United Republican Party (Kenya) UPC Uganda People’s Congress UPDF Uganda People’s Defence Force WRS Warehouse Receipt System ODI Report vi East African prospects vi Executive summary This report provides an update on the political economy of four East African countries: Kenya, Tanzania, Rwanda and Uganda. Based on published research, media reports, the authors’ inside knowledge on certain topics and recent interviews with well-placed observers in the region, it is intended to provide guidance to any practical development organisation approaching a new phase of strategic planning in East African Community (EAC) member states. The Overseas Development Institute managed the production of the report, but it is an independent study reflecting the perceptions and opinions of the four authors. The report is not a comprehensive treatment of the many important and interesting things currently happening in East Africa. The focus is on political economy and the implications, in particular, for modalities of support to the development of productive sectors in the four countries. In planning the work, the authors sought to address a number of themes of concern to practical development organisations across the region as well as topical issues concerning particular states. These were grouped under five headings: linkages between political and economic power, including the incentives and norms that regulate the behaviour of political and economic actors; presidential authority as a source of development leadership, including its role in either centralising or dispersing the accumulation of rents; political challenges – the extent to which parliamentary politics has become a force for change – and institutional constraints: whether regulatory bodies or governance initiatives are able to check vested interests; issues in the governance of economic growth, including attitudes to competition; and prospects and risks in the near and medium-term future, and strategies for addressing them. The report has four sections that deal in greater or lesser detail with these topics for each of the focus countries. They are preceded by a framing section, which aims to anchor the country analyses in some of the major themes of recent scholarship on comparative development, with particular but not exclusive reference to sub-Saharan Africa. A concluding section pulls together some conclusions
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